Speech at Singapore Hotel Association (SHA)/ Singapore Tourism Board (STB) Hospitality Summit
Dr Amy Khor, Senior Minister of State for Health , Manpower, Novotel Singapore Clarke Quay
Mr Albert Teo
1st Vice President of the Singapore Hotel Association
Mr Lionel Yeo
Chief Executive of the Singapore Tourism Board
Distinguished members from the Hospitality Industry
Faculty members and students from the tourism education institutes
Ladies and gentlemen
- I am pleased to join you at this inaugural SHA/STB Hospitality Summit, which is a part of the National Productivity Month.
- Organized by the Singapore Hotel Association (SHA) with support from the Singapore Tourism Board (STB), this Summit aims to inspire the hotel industry with best practices, methods and ideas on how hotels can improve productivity.
- The theme for this Hospitality Summit is “Innovate to Unlock New Value”. In line with this, SHA and STB have curated a programme featuring renowned local and overseas speakers who will share insights on innovation in their respective fields. There is also an exhibition showcasing selected hotel technologies that will improve business efficiency available for viewing at the foyer area. Do make it a point not to miss it.
Sustainable Growth in the Hotel Industry
- As the sub-sector which employs the largest share of the tourism workforce, the hotel industry is one of the 16 priority sectors identified by the National Productivity and Continuing Education Council (NPCEC).
- The hotel industry has been experiencing sustained and healthy growth. Between 2010 and 2013, the hotel industry has observed a 6% CAGR in both the average Revenue Per Available Room (RevPAR) and Average Room Rate (ARR). The Average Occupancy Rate (AOR) has also remained above 85% since 2010.1 As of Aug 2014, the gazetted hotel revenue was at $2.1 billion, marking a 8.8% increase year-on-year. Average occupancy rate was maintained at 86%.2
- Nonetheless, hotels continue to face manpower challenges in two key areas. Firstly, overall workforce growth in our economy, including the tourism sector, will slow down. Singapore’s overall workforce grew at 3.3% per year in the past 30 years but is expected to moderate to 1-2% per year for the rest of this decade3. In contrast, the hotel industry had been experiencing a much higher workforce growth of 5.5% per year since 20094. Despite this large workforce growth, we know that many of our hotels are still facing a manpower shortage today. Hence, hotels that wish to grow must adapt to the manpower challenges ahead.
Secondly, the changing aspirations of Singaporeans mean that we need to look seriously into matching good hotel jobs with local aspirations to remain competitive in attracting and retaining talent. By 2030, two-thirds of Singaporeans will expect to hold PMET jobs5. Currently PMET jobs comprise less than 30% of the hotel industry’s workforce6. Hence, hotels will have to consider how they can provide careers that better match the aspirations of Singaporeans.
- To overcome these challenges, it is also an imperative for hotels to transform their business models and processes to be more productive and less manpower reliant, in order to grow sustainably.
- The STB supports the industry’s efforts towards raising productivity through the Hotel Productivity Roadmap, of which technology and innovation are key drivers.
Leverage Technology to Enhance Productivity
- Increasingly, hotels have benefitted by reducing manual and labour-intensive processes through technology adoption.
- For example, One Farrer Hotel and Spa, a luxury hotel which debuted in end-August aims to operate with 30%7 less manpower relative to industry norm through the adoption of technologies and redesign of standard industrial processes. The hotel implemented a fully-automated conveyer belt system to enhance efficiency in managing laundry. In addition, the hotel installed a bed-lifting system in its rooms to assist room attendants in lifting the heavy mattresses for better workplace safety and improved productivity.
Encouraging Innovation to Enhance Productivity
- Innovating our service and product offerings will also be key to achieving breakthroughs in productivity.
A recent Straits Times feature on 20 September highlighted the “select service” concept which is catching on in Asia8. The article cited examples of hotels such as the One Farrer Hotel and Spa and the Holiday Inn Express Clarke Quay redesigning traditional business models with the introduction of e-concierge services and express check-out services through the check-out button on the Smart television. These adjustments enable hotels to better cater to the changing needs of today’s global travellers, and at the same time, allow manpower to be more optimally deployed. This is an encouraging development, and the government, through STB, supports the industry in prototyping innovative solutions to improve processes holistically.
- Today, I am pleased to share that STB has been working with Far East Hospitality on a collaboration to test-bed various initiatives in one of their properties, Village Hotel Katong. The collaboration aims to yield quantifiable productivity data such as cost and manpower savings, which could be shared for the benefit of the wider industry.
- Far East Hospitality took a multi-faceted approach in reviewing their current processes to identify potential areas for improvements. The projects which they embarked on included testing of a self-service check-in kiosk, shared services for laundry, and a redesign of in-room offerings in order to increase efficiency.
- In particular, the self-service check-in kiosk is a customised solution developed to meet Singapore’s operating context with features such as facial recognition technology to authenticate guests.
- With self-service check-in options being increasingly offered in hotels and airlines, more travellers are aware of and open to using such options for an efficient and seamless experience. Hotels can also benefit from freeing up manpower to perform transactions that can be automated, thereby allowing staff to create more meaningful interactions with guests to deliver a differentiated service.
- I look forward to seeing success in the STB and Far East Hospitality collaboration and would encourage more hotels to come onboard to generate and experiment new solutions that could be scaled up to the rest of the industry.
Hospitality Summit Challenge
- In an effort to encourage collaboration between the industry and institutions and to nurture the next generation of business leaders in the hotel industry, SHA and STB jointly organised the Hospitality Summit Challenge in the lead-up to this Summit.
- Over the past six weeks, nine teams, each comprising four members, from polytechnics, ITE and SHATEC were given the opportunity to work on real business challenges, guided by senior management from eight leading hotels. They then came up with proposals and ideas to tackle productivity and manpower challenges faced by the hotels.
- Such a challenge creates an opportunity for students from the educational institutions to interact with the industry and broaden the student’s exposure to the industry. I hope such interactions will generate open and creative thought processes when these students join the industry in the near future. For the industry, such collaborations with students and educational institutions should be continually explored to develop the pipeline of talent that will be much needed as the industry matures.
- In conclusion, we laud the industry’s efforts in nurturing the next generation with relevant skills to take on an exciting career in hospitality. The industry has also come a long way in their productivity efforts and we are encouraged by an increasing openness to test and deploy such initiatives in different hotels. We must remain steadfast in this journey and together forge a brighter future for the hotel industry, as we ride on the growth opportunities presented by the tourism sector in the years ahead.
- May I now invite you to view the technology exhibits and the winning entries of the Hospitality Summit Challenge in the foyer area during tea break which I believe will leave you with fresh inspiration. In addition, I encourage you to actively participate in the panel discussion later this afternoon with our local and overseas experts.
- On this note, let me wish everyone a fruitful time of learning and sharing. Thank you.
2 Tourism Industry Conference 2014 Speech
3A Sustainable Population for a Dynamic Singapore – Population White Paper, January 2013, Pg 42
STB internal calculation. Also presented at Tourism Industry Conference, 7 April 2014, presentation Pg 36 https://www.stb.gov.sg/Documents/tic2014_stbce%20presentation.pdf
5A Sustainable Population for a Dynamic Singapore – Population White Paper, January 2013, Pg 32
Calculated from data provided by MOM. Also presented at STB Tourism Industry Conference, 7 April 2014, presentation Pg 37 https://www.stb.gov.sg/Documents/tic2014_stbce%20presentation.pdf
Tourism Industry Conference 2014 Speech
Straits Times, “The New Urban Oasis”, 20 September 2014